U.S.
Meet your liability obligations
Fixed income is often the cornerstone of a successful ALM solution. Given the unique nature and term structure of a typical liability schedule, many institutional investors require solutions that are highly customized or structured. We offer a spectrum of highly customized solutions to help you meet liability obligations.
Cash Flow Matching
Cash flow matching strategies generally involve structuring a specialized bond portfolio dedicated to funding a prescribed set of liability payouts over time. This matched-funding technique reduces the uncertainty of investment results related to fulfilling specific liabilities, while minimizing potential reinvestment costs.
Laddered Bond Portfolios
Laddered bond portfolios can often be an effective strategy to match an investor's duration and risk preferences. With cash flows essentially diversified over time, investors obtain a balanced position between the two primary sources of interest rate risk – cash flow reinvestment and market price volatility.
Immunization
Immunization strategies generally seek to minimize interest rate risk while retaining some degree of manager discretion to pursue lower costs or higher returns. The primary objective is to structure a portfolio such that its value will meet or exceed the present value of its underlying liabilities across a set of interest rate changes.
Horizon Matching
Horizon matching can be an effective hybrid strategy. This approach is an immunization strategy with an added constraint that it be cash-matched in the first few years. The advantage is that the liquidity needs are provided for in the initial cash-flow matched period, where a liability schedule may be known with greater certainty.